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Amazon’s US Prime Membership Base Might Slow Down

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Mar. 1 2019, Published 11:07 a.m. ET

Amazon’s prime membership

Amazon’s (AMZN) revenues from its Prime membership are showing signs of slowing down. The e-commerce giant doesn’t disclose the revenues from its Prime membership. However, Amazon’s Prime revenues likely make up a large portion of its revenues from subscription services, which the company does disclose.

As the following graph shows, the revenues slowed down considerably in the fourth quarter. The company increased the membership rate from $99 to $119 annually in mid-2018 in the United States.

There’s a possibility that the Americans are balking at the new rates and dampening the Prime user base growth.

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Prime members in the United States

According to the latest estimates by eMarketer, Amazon’s US Prime membership base grew 12.6% to 58.7 million in 2018 compared to the previous year. The research house predicts that the growth rate will slow down to 8.8% this year and reach 63.9 million. eMarketer thinks that the number will reach 71.7 million in 2021.

In April, Amazon said that it had more than 100 million subscribers around the world. However, the US will likely be the most lucrative country for the company.

eMarketer expects that 51% of US households will be Amazon Prime members this year. Even though the growth appears to be slowing down, it’s still high considering that the US is a mature market for Amazon.

Even though fewer people are becoming members, there are still a lot of people in Amazon’s ever-increasing ecosystem, which the company could monetize better at a later stage. According to experts, Prime members spend much more on Amazon’s platform than regular customers.

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